Liquidity before price: why sell-through rate may describe markets better

H3 · Status: open · Confidence: E (insufficient data)

ANALYSIS — the problem with price alone

Two markets can show the same median asking price while behaving completely differently: in one, listings clear in days; in the other, they sit for months and the median is a wish, not a market. Price tells you what sellers hope. Liquidity tells you how fast the market clears hope into transactions.

Definitions we use

• Sell-through rate = transactions ÷ listings per period.
• Time to sale = median days from listing to disappearance.
• Inventory days = listings ÷ daily transactions.
• Transaction velocity and listing velocity = counts per day.

HYPOTHESIS

Liquidity metrics explain market state (normal / rising / falling / oversupplied / shortage) with higher accuracy than price momentum alone. Falsification: a price-only classifier matches or beats the liquidity-augmented classifier out of sample.

Why this is testable here

Our listing snapshots record first-seen and last-seen timestamps, so time-to-sale distributions emerge from observation alone — no transaction feed required for the first version of the test.